Marketing Plan Step by Step Essay
The 6 Steps of a Marketing Plan
A strategic marketing plan is an integral part of an overall business plan and is crucial for a firms competitive position and success. Developing a marketing plan forces the managers to ask the key questions about the current situation and where the company is heading to ensure future profit and growth: Who are our customers? Who should they be? What do they want? How can we achieve that? How can we add value? If these questions are not asked, the customers needs are automatically neglected and the results are unwanted products.
The modern way of strategic lancing, including the development of a marketing plan, puts the customer first in the value chain. Based on the
customers needs, the market for brand/service/product is segmented, positioned and finally produced – and not the other way around. The different steps to create a marketing plan are illustrated on the following pages.
1) The Marketing Audit
To develop a working marketing plan the current situation of the company and the market has to be analysed. Sometimes extensive marketing research needs be done to answer questions such as: Are there certain market dynamics. Seasonality? Who are my competitors and how well are they doing? Who are my customers? Who are the suppliers I need to rely on? Is my product easy to distribute? Are there any benchmarks in the industry? To complete the audit it is helpful to do a SWOT analysis and identify what the major Strength, Weaknesses, Opportunities, and Threats are. For example: Strengths can be viewed from an internal, but also external, the customers perspective: What advantages does the company have? What do we do better than our competitors? What makes the product unique for the customers? Identify the companies Weaknesses:
What are the reasons our competitors are ahead of us? Where can we improve? What is the weakness our customers see? Opportunities could be: Are there any trends (technological, social, etc) in the market that we can follow? Are there any disadvantages of our competitors that we can benefit from?
6 Steps of a Marketing Plan
What obstacles does the company has to face in the future? Are the competitors ahead of us in any way? Can the company keep up with any changes/developments in the market? What are your competitors doing? Are quality standards or specifications for your Job, products or services changing?
The Mission Statement
The next step should be creating a mission statement. The mission statement should identify the scope of a company and it’s goals, should set clear objectives and be a guide for employees. The objectives can be divided into the Marketing Objective (sales, market share, etc. )
Innovation Objectives Resource Objectives Productivity Objectives Social Objectives
3) Strategic Priorities
The more ambitious the mission statement is, the more capital is needed to achieve it. Therefore a company has to decide where the priorities are to manage the sources of a company into the direction with the most potential.
In which markets should be invested? Which markets should be divested from? To agree on what the companies main focus needs to be, a portfolio analysis is conducted. Peter Trucker established, that each companies products can be divided into 6 categories.
1. Tomorrow’s Breadwinners
2. Today’s Businesses
3. In-between Category (performing poorly but can turned around)
4. Yesterday’s Businesses
5. Also Ranks
Management can only Justify to priorities the first to categories – the others cost too much money and bring little profit.
The others need to be phased out to make place for products with more potential. One of the most used portfolio analysis models is the McKinney Matrix. It is a nine- cell matrix that allows management to map their products as strategic business units in two dimensions: Business Positions and Market Attractiveness. The Market Attractiveness axe is divided into three sectors: low, medium and high. The Market The goal is, to place each product in this nine-celled matrix to identify those who have a high attractiveness and a strong position in the market and the priorities them.
4) Marketing Strategy
Once the portfolio analysis is completed the next step is to think about the marketing strategy with two major elements: segmentation and positioning. These two elements should be the heart of any marketing plan since they will determine whether the business will be a success or a floor. Segmentation is key to the success of a product, because a target market is never a homogeneous group. Different types of customers have different needs and these different customers categories have different price sensitivities. Identifying the major customer groups and taking advantage of the differences is key to marketing today.
Usually the price differences between the premium customer base and the economy customer base is 10:1 . Therefore good segmentation can increase the profit extremely. The easiest way to look at segmentation is to start with the differences in customers needs and then think about how the product/service can be modified to be attractive to each customer group. Finally decisions can be made on how prices can differ for each segment. After the basic segmentation is done, the management now has to decide on the appropriate positioning. To come to a working result, the company should look into he customer segments into detail.
It should be decided on the most attractive segment, identify the competitor and what the customers choice criteria are as well as their evaluation of the brand.
There are different strategies to position a brand/product/service: Real Positioning and Psychological Positioning. Real positioning aims for the measurable objectives and is about changing the actual characteristics of a product/service.
There are 4 strategies: The Original: only one product can be the first on the market; The New attribute: following products have to differentiate clearly.
Strengthen the current position Search for a new position Psychological positioning on the other hand, focuses on the customers emotions and how to change them. Change strategies can be altering belief about the brand attribute importance weights displacing competitive brands
5) The Marketing Mix
Product Service Price Promotion Place/Distribution
Product: The brand is very important for the success of a product. Because any service or product can be easily copied, the key is to differentiate and add value for the customers.
Building a brand is absolutely crucial for a company, because a well established brand is what is sustainable and helps all future products.
There is the Basic Brand: a name that can be easily remembered, design, image, quality;
Augmented Brand: this could be a guarantee or special customer service;
Potential Brand: what is the personal statement a customer can make by purchasing/ possessing this brand/product.
Service: Many companies offer products that perform equally well – service is what differentiates them.
The main reasons why the focus on service has become more important is that service differentiators are harder to copy.Further, the concern for revive is higher than ever because it has become obvious, that a lack of service can become extremely expensive. Read also “Does marketing create or satisfy needs
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Price: Simplified, the price for a product can be easily calculated with a formula considering the production costs. But the real determining factor is the competitive value of your brand to its target markets. If the value is high, the price can be high too. One way to choose the appropriate price policy is to position the product in a nine celled matrix with the two elements price and quality. Split up by low, medium and high on both axes, a product with a high value should be sold for a high price.
However, in a dynamic market it is extremely difficult to maintain a certain position. Competitors will constantly try to beat your position and value for your customer. Any product will have to be modified on a regular basis to remain successful. Promotion includes advertising, direct marketing, selling and PR. The main goal of promotion is, to communicate and build up the value of the product to our customers. In general all promotional tools vary in effectiveness over a products life cycle. Advertising and PR, for example, have a higher priority in the early stage of a reduce launch, to build up awareness of the product.
Later on, selling becomes more important.
Place/Distribution: The choice whether or not to use an external distributor is mainly based on the costs and efficiency. The criteria for the choice of the distributor are the target market itself, the complexity of the differential advantages and finally, the motivation and commitment of the distributor. If all steps above are completed, it is up to the management to decide on the actions to take: What? When? Who? This plan contains a detailed chart of all the activities for all stakeholders over the set erred of time.
It is also the stage when a detailed finance plan has to be set up: What is all this going to cost? What returns are we expecting? Once the plan is completed, the whole concept has to be reviewed with a focus on the companies resources and structure. One of the biggest issues in the final stage off marketing plan is very often the relationship between the marketing and the sales department. It is in the nature of those sectors, to have different focus. While the sales department will focus on meeting the sales targets in a short period of time, racketing will always seek a long term solution.
Further, marketing is focusing on profit and not on selling volume, like the sales department does. These are clearly two different objectives. Finally, they also have a different customer focus: sales will see satisfying the retail chains as the real success while marketing aims for the ultimate consumers satisfaction. One possible solution, to avoid these issues is to merge the marketing and sales department to be managed by one person with full responsibility for sales, profitability and market development.